Archives for March 2016

Rooftop solar is one of the greatest technologies one can invest in these days. The cost of the rooftop units are coming down; it allows individuals to move toward self-sustainability; It reduces our dependence on foreign oil; and it even allows individuals to go entirely off grid and operate independent of utility companies.

So why would I make a statement about rooftop solar not being conservative?

Don’t get me wrong. If I had the means, I’d take my entire home and business off the grid for the reasons I listed above.

It comes down to one word – Independence.

A few years ago, I jumped on the anti-utility bandwagon over net metering and the push to reduce the retail rate. I had to suspend common sense and all those years of economic education to make the argument. I didn’t have the whole picture and the mountains of research to back up that claim.

The rooftop solar industry is dependent on taxpayers – especially taxpayers who don’t have rooftop solar units installed on their rooftops. That’s consumers like me who cannot afford to lease a product and service that relies on subsidies from consumers like me. To clarify, rooftop solar is still too expensive that average consumers have to sign a lease over a long-term period in order to make it affordable.

The rooftop solar industry is also part of broader political agenda by those typically on the left and in environmental movement who seek to eliminate all non-renewable forms of energy production. This comes at a tremendous cost – especially to consumers.

Integral to this political agenda, policy makers and rooftop solar executives have created a climate in order to make an expensive industry appeal to average consumers. It comes down to manipulating the market and creating artificial incentives in order to attract more consumers to its product.

Imagine if the top executives of Mercedes, Jaguar and Rolls Royce sent their lobbyists to Washington to obtain taxpayer subsidies so they could attract you into a lease of one of their vehicles? You sign a lease to get into their car. They get a break through some tax loophole and the cost of taking care of our roadways is passed on to the individual who can only afford to drive a 10-year-old used car.

The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy. It’s a clear example of corporate cronyism that puts taxpayers at risk or worse, leaves them footing the bill when the company goes bankrupt – as we’ve already seen several times.

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The reality is that many solar companies cannot even operate as a viable business without some form of government subsidy.[/pullquote]

The rooftop solar has been benefiting from these market manipulations through the policy of net metering. They tell you that you can sell your solar-generated electricity back to the utility companies and pay less for your overall electricity. On a self-interest level, that’s great. But what they don’t tell you is that you’re selling back that electricity (actually, you’re receiving a credit) at an inflated rate and someone else is paying for it – a redistribution of utility costs.

Rooftop solar companies don’t own the grid and they don’t pay for the cost and maintenance of the grid. And because utility companies are paying above-market inflated rates, the cost of maintaining the grid is being shifted over to those without solar technology.

In effect, the rooftop solar industry has created a whole new level of dependency. They’ve made leasing consumers dependent on them. They’ve become dependent on net metering policy and utility companies have become dependent on non-solar customers. And when a solar company pulls its plant out of a state like what recently happened in Nevada, they leave a whole lot of people without jobs. There’s nothing sustainable about the overall climate and policy in which the rooftop solar industry operates.

In a perfect world, everyone would be able to afford solar technology without signing a long-term lease contract with the rooftop solar industry. We wouldn’t have to rely entirely on the grid and utility companies wouldn’t have to worry about covering the cost of maintenance in order to provide a reliable source of electricity.

To move toward that perfect world, we can start by eliminating the policies that pick and choose winners and losers through subsidizing and manipulating the energy marketplace.

That’s where real independence can begin and energy independence can thrive.

Diamondbacks face a hard sell to Maricopa County Voters for Stadium Funds

(Phoenix, AZ) — MBQF, a public opinion survey consulting firm, announced today the results of a recent public opinion survey conducted on March 24, 2016. Results from the automated survey show likely Maricopa County voters who responded “Yes” to having attended an Arizona Diamondbacks game within the last 2 years. MoE of ± 5.59 and 407 total respondents.

The Question was read as follows:

In your opinion, when you were there, what would you judge the condition of the stadium?

Very Good – 61.2%Good – 31.9%Poor – 2%Very Poor – 1%No Opinion – 3.9%

The Arizona Diamondbacks are requesting 200 million dollar upgrade for deferred maintenance and upgrades to the stadium. As a Maricopa County taxpayer, would you support spending tax dollars for this?

Yes – 18.9%No – 62.7%Not Sure/Undecided – 18.4%

MBQF Principal Mike Noble concluded, “The Arizona Diamondbacks desire for taxpayers to step up to the plate with nearly $200 million is a big swing and a miss,” Noble said. “Fans believe Chase Field is still a first-class facility and prefer to sing Take Me Out to the Ballgame at the corner of Jefferson and 4th Street.”

Teachers, like Maddy in the below video, don’t have the resources they need in the classroom to help students succeed. That’s why passing Proposition 123 on May 17th is so important to educators and their students.

Maddy has 34 students in her class, but only 25 books in all her class sets. If Prop 123 passes, her school will get additional funding to help fund essential supplies and retain quality teachers.

Watch the video to learn more about Maddy and why she’s dedicating her time to ensuring Prop 123 passes.

Speaking before one of his smallest crowds this campaign season, Donald Trump declared Friday night at a rally in Salt Lake City that he loves the Mormons.

The feeling does not appear to be mutual.

So far in 2016, members of the Church of Jesus Christ of Latter-Day Saints have proven to be one of the most stubbornly anti-Trump constituencies in the Republican Party — a dynamic that will likely manifest itself in Utah’s presidential caucuses next week.

National polling data focused on Mormons voters is hard to come by, but the election results speak for themselves. Even as Trump has steamrolled his way through the GOP primaries, he has repeatedly been trounced in places with large LDS populations.

Here is a great assessment by my political consultant peer Sean Noble regarding the current state of the Republican Party and what is driving the Trump faction in the GOP.

Sean recently appeared on Carey Peña Reports which is available on iTunes podcasts.

Although the interview was recorded on this last Tuesday with the prediction that Marco Rubio would mount a comeback in Florida, the rest of the assessment is spot on when it comes to what is driving the frenzy around Trump and how it will redefine or even destroy the Republican party.

I agree with Sean on this assessment and its one of the reasons why I cannot sit back and allow the GOP to be hijacked out of emotion and without a good dose of critical thinking.

Another point I agree with Sean on is that it is only about 20-25% of the population that is driving the Trump movement – a very loud and angry vocal minority.

An Arizona State Senator is pursuing a strange, populist course of action that puts her in camp with Bernie Sanders and Elizabeth Warren- the sort of interest rate voodoo that helped create the financial crisis:

Arizona State Senator Kimberly Yee is not making any new friends among the free-market Republican crowd in Arizona. In a recent Senate hearing, Yee, who has been touted as a rising star in the party, held her fire after a long debate until the voting opened on a financial services bill in her committee. She then unloaded with full ammunition on the financial services industry and their free market principles.

“This bill just doesn’t feel right,” Yee proclaimed. “I am standing with the poor,” while attacking the well-funded groups who were supportive and their consultant class.

Yee went on to explain she has a “strong moral compass” and wants to protect people – that she would possibly consider a bill capping interest rates on loans in Arizona, a position which is specifically prohibited under federal law by Dodd-Frank. By promoting rate caps, Yew veers left of the Obama Administration.

The issue at hand in last month’s Senate Commerce committee hearing was a proposed consumer lending bill known as Flexible Credit Loans, which would create a new credit product for up to $2500 over the course of a two-year loan term. Yee emphatically stated she could not back the measure before teeing off on its supporters with a blistering rhetoric.

The bill (and ones like it across the country), however, is supported by a broad base from left of center to the far right. In Arizona, leading free market groups, the Arizona Free Enterprise Club and the Goldwater Institute have spoken out in favor of the legislation.

One conservative Republican interviewed on the subject off the record stated that they were quite surprised at Yee’s comments and mini tirade. “She sounded more like Bernie Sanders than an Arizona Republican. I’m not quite sure where all of that came from.”

Media coverage of the electricity rate case filed by UniSource Energy Services (UES) has promoted dire predictions from California-based rooftop solar leasing companies that oppose the proposal. We encourage every utility customer to consider the facts of the UES case.

UES has proposed residential rates that reflect both total energy use and peak energy use, or “demand.” This makes sense because utility costs are driven by the need to satisfy customers’ energy demands during peak periods. Arizona business owners have been paying demand-based rates for years and have found them to be fair, simple and easy to use. They include a basic service fee, a relatively low usage-based charge and a demand charge that’s based on their highest monthly power use.

Critics claim demand rates are “too confusing.” As smart thermostats and app technology grow ever smarter, this claim falls short. Demand rates give consumers a new way to save money by managing their use of electric appliances during peak usage periods. Smart technology can help customers take advantage of demand rates to lower their bills significantly. At the same time, reducing energy usage during peak times helps ensure the stability of the power grid statewide.

Because demand charges would be offset by lower energy use charges, most residential customers would see little impact from the proposed change. In fact, the UES proposal protects customers by reducing the generous subsidies handed to rooftop leasing companies at the expense of the 98 percent of consumers who don’t have solar. That’s why we’re hearing the loud voice of protest from the solar industry’s PR machine. UES’s proposal will create a sustainable free market for clean energy and send the right price signals to encourage future energy innovation. That’s important to every Arizona business. All of us want our state to stay at the forefront of the clean energy movement and to continue to create jobs in that growing sector.

Unfortunately, jobs have become a political pawn for the rooftop leasing companies. In Nevada, these companies fired their own workers and fled the state as punishment after policy changes took the brunt of subsidy payments off the backs of non-solar customers. They’ve threatened the same punitive behavior in our state. This “take our toys and go home” approach will hurt Arizona families and our economy. As reputable case studies and testimony explain in detail, rooftop leasing companies can continue to make ample profit under a demand rate structure should they elect to compromise, rather than litigate and flee to other states where generous profits are still to be had on the backs of non-solar customers.

Using employees’ paychecks as a bargaining chip is wrong. So is intentionally disrupting the businesses of local installers – the very people the California-based national giants once claimed they wanted to help.

Arizona needs an energy policy that encourages a broad array of technologies and the highest degree of freedom and fairness for all power users. The more control consumers have – absent subsidies paid by the vast majority of power users to fund technology for the few – the better off our state will be. To hear the rooftop solar leasing companies tell it, you would think the goal of energy policy should be whatever helps them sell the most systems at the largest profit.

We take a broader view. We sincerely hope the Arizona Corporation Commission will take that broader view as well.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. Lea Marquez Peterson is the president and CEO of the Tucson Hispanic Chamber of Commerce.

The takeaway on the story is that Obamacare is a redistribution and degradation of the quality of healthcare. According to the survey 27% of Ohioans say Obamacare has directly hurt them while 21% say it has directly helped them.

Lilo Whittaker, who responded to the poll, lives on a wooded one-acre lot in rural Ohio. The setting is idyllic on a cold winter morning. Chickadees chirp outside and a pot of coffee brews in the kitchen.

But at nearly 60 years old, Whittaker says the picture isn’t perfect. When Whittaker first heard about the federal health overhaul several years ago, she expected it would help.

“I thought, this is great,” Whittaker says. “People will be able to afford their health insurance, get decent coverage and begin to take care of their medical issues.”

But, in the past two years, Whittaker says, her husband’s Parkinson’s medications went from just over $150 a month to more than $400. The couple’s health insurance coverage has also become less affordable.

“A lot of people like me will forgo going to a doctor even if they have a problem because you can’t even afford your deductible or your copay,” she says. “And I don’t think your health insurance issues here are addressed properly.”

Couple this story with an article in the Washington Times in which H&R Block is reporting that the average tax penalty for not purchasing health insurance is $383. For many Americans who still cannot afford insurance, this is a huge burden. Many Americans were expecting a tax refund only to find out the government penalized them when they did their taxes.

Halfway through tax season, uninsured filers are paying more than twice as much as they did last year to satisfy Obamacare’s penalty for lacking coverage, H&R Block said Tuesday in an analysis that found other customers are still struggling to match their incomes to tax credits they got from Uncle Sam.

The tax-prep giant said its customers are paying an average penalty of $383 because of the Affordable Care Act’s “individual mandate,” compared to $172 last year.

This is what happens when government entangles health insurance into your personal income taxes.

Obamacare has become an utter disaster. The next Republican president better lead the charge to repeal it and replace it with free market solutions.

In a prior post I provided a primer on the economics and politics of the rooftop solar industry in Arizona. Net metering was essentially a solution to the initial introduction of rooftop solar into the residential consumer market. The rooftop solar industry took advantage of the political process by carving out a government-sanctioned incentive in the market that allowed them to operate and profit despite harsh economic realities in the renewable energy market.

Rooftop solar companies lease their solar panel system to consumers because the vast majority of consumers cannot afford a system that costs tens of thousands of dollars. They needed an effective marketing message to “sell consumers” on leasing their product – an incentive to overcome the objection of cost. Thus net metering was offered as an incentive.

Here’s how it works. Most consumers do not use all the electricity generated by their rooftop system throughout the day. Net metering allows any excess electricity to be “sold” back to the main electrical grid. Consumers effectively build up a credit for the excess power they provide back to the grid. The amount of that credit is based on a retail rate that is higher than the wholesale market rate offered on the grid.

That difference between retail and wholesale electric rates is what has become the center of dispute between the rooftop solar industry and utility companies. It adds up to millions of dollars.

Utility companies argue that the cost to repair, maintain and upgrade the main power grid has not been taken into account as the market for rooftop solar has expanded. As utility companies continue the practice of net metering and purchasing back electricity at a rate higher than market value, it is negatively impacting the cost to maintain our electrical infrastructure. These costs ultimately get passed on to ratepayers, especially those who cannot afford to install and lease expensive rooftop solar systems. The result is that rooftop solar customers are paying less than non rooftop solar customers for the maintenance and improvement of our power grid.

This is where the idea of a “demand charges” becomes an economic and equitable solution for all users of the grid.

Rather than continuing an unfair solar net metering policy that gives wealthier ratepayers an advantage over lower income ratepayers when it comes to maintaining the grid, why not charge individuals for the demand that they actually place on the grid?

Most electricity consumers put most of their demand on the system during the early morning and early evening. It’s part of our daily routine: wake up, eat, prepare for work and head off to work. In the early evening, we come home, cook, clean and entertain ourselves before repeating the same routine the next day. Now aggregate that across millions of households and its easy to see how residential demand on the grid spikes twice a day.

Demand charges are determined by the maximum amount of electricity demanded by a consumer during a specific measure of time such as a day, week or billing period. This is the cost or strain placed on the grid when turning on appliances, air conditioning, etc. and is especially prevalent here in Arizona during summer months. Consumers who run all their appliances at the same time every day place a higher demand on the grid than those who spread their use of their appliances out over the same 24 hour period.

Here is a video put out by a South African utility company explaining the concept of energy demand charges:

Here in Arizona, the Arizona Corporation Commission is hearing a request from Tucson’s Unisource Energy Services – the utility that provides power to rural and southern Arizona. In its request it is seeking a rate increase and structure for ratepayers in Mohave and Santa Cruz County in order to alleviate the burden on the power grid and non-rooftop solar ratepayers. The request includes adjusting the net metering rates to current market values and implementing “demand charges” that allow it to compensate for the demand on the grid.

California-based rooftop solar companies are lined up in opposition to the changes and have even threatened to pull out of Arizona cutting hundreds of local jobs. These are the same companies who are profiting off the artificially-priced subsidy set in net metering. If UNS wins approval of the market rate adjustment in its net metering rate request, only new solar installations will receive the market-adjusted subsidy.

The UNS request also includes approval for a “demand charge” meant to cover the costs associated with peak demand. This charge would be optional for residents and small businesses but would be mandatory for any new rooftop solar installations which “create new cost burdens and reliability concerns for utilities and their customers.”

If approved, such changes will begin the process of correcting manipulations in the market and reducing special subsidies for residential rooftop solar industry.

As someone who opposes government sanctioned subsidies, it’s time that solar users finally help cover the cost of the grid that non-solar users have been paying for without receiving any benefit. Implementing “demand charges” and adjusting the net metering rate are necessary decisions to restore a free market solution to a corporate cronyism problem. It’s the fair and economically sound thing to do and maintain the reliability of our power grid to the benefit of all consumers.

About Sonoran Alliance

Arizona's most popular and prominent political blog covering political news and events, commentary and information with a blatantly conservative worldview. We are an alliance of writers, activists, consultants and government insiders.